Sales Finance A Tool for

more Profitable

SalesJim HowardKevin Nies

John Deere Financial

• Kevin Nies • Inside Sales Representative

• Madison, WI

• Jim Howard• Inside Sales Representative

• Johnston, IA

You Will Learn

• Who Is John Deere Financial

• Why Sales Finance is Growing In Usage

• What Sales Finance is and How to Use It

• When To Offer a Sales Finance Incentive

• How to Build Sales Finance Programs, How to Submit

Transactions & Reports

History of Multi-use Account

Purchased by John Deere Financial in the mid 1980s, Farm Plan has been a part of the John Deere for more than 25 years.

The multi-use account was originally established in 1974 as Farm Plan™. The Wisconsin Equipment Dealers Association cooperative effort to eliminate the expense, hassle and risk of in-house receivables.

On June 1st, 2011 we were proud to announce that Farm Plan will now carry the John Deere Financial name.

Types of short-term farm debt

Financial solutions that meet your needs

30-day accounts Seasonal Operating loan

Accounts receivable management

Traditional Accounts Receivable

•Each sale is funded 30-60 days later

•Involves follow-up and collection time

•Open accounts are subject to risk of bad debt

•Requires capital funding to maintain

•Encompasses a wide variety of costs

•A/R is not a high returning asset

John Deere Financial Solution

•Provides two-day funding for approved multi-use account sales

•Eliminates collections and conflicts of interest

•Insulates merchant from risk of bad debt

•Increases working capital and cash flow

•Reduces cost and expenses

•Frees up time to focus on profitable opportunities

John Deere Financial Overview

Multi-use account

Regular Credit Limit(30-Day Credit Terms)

Special Terms Credit Limit(Deferred Credit Terms)

• Multi-use account is a revolving charge account

• Special Terms Limits are utilized for Input Financing

“81% of farmers say they use input financing.”

Survey Question: What percentage of your input purchases do you finance through suppliers’ programs? (Instead of paying cash or using an operating loan)

“53% of all farmers say special financing on products will persuade them to buy more of those products.”

Survey Question: Does a special financing offer on the products you buy, drive you to buy more of those products?

John Deere Financial Customer Trends

Key customer findings:

•75% of sales finance users prefer it for the cash flow and convenience

•Over 50% of producers say a finance option will influence the timing and the type of products they may purchase

•68% of “expanders” plan to use sales finance

Seed Company results:

•22% increase in seed units sold when using sales finance versus cash

•15% increase in new customers when offering financing with the promotion

•Finance customers purchased higher technology / more profitable products (Upsell)

John Deere Financial Merchant Trends

“22% of responders plan to use more input financing in the future.”

Survey Question: How would you expect to use agricultural input financing five years from now?

42.15%

21.52%

18.39%

17.94%

Independent Regional Seed Companies

• What About Regional Seed Companies?

24%

• What Will Happen This Season?

• Sales Finance Volume Increased:

The Value of Sales Finance

Sales finance is a marketing program with a finance incentive

It assists your sales efforts by helping you: •Up sell

•Differentiate your offerings

•Sales finance works best when it’s positioned and offered during the front of the sales process as it drives the purchase behavior of growers

•Close the sale by addressing cash flow with seasonal terms

•Strengthen customer relationships and build loyalty• Customers are looking for companies where they can purchase

and finance their purchase

Why John Deere Financial Sales Finance Programs?

• Attractive interest rates- Fixed Zero- Below Prime

• Crop terms

• Cash flow flexibility

• Unsecured debt

• Expanded borrowing base

• Allow pre-pay positions to work longer

Grower Benefits Seed Company Benefits

•No cost programs

•Capture more acres with early commitments

•Increased product sales- Purchase more product- Purchase increased margin products

•Enhanced grower retention

•Expanded cash position with two day funding

•Elimination of recourse and collections

When To Offer Sales Finance

• Pull Sales Forward

• Gain Commitment

• Lock in Acres

• Lock out Competitors

• Improve Customer Loyalty

• Get Paid Early

• Better Sales Projections

• Shift Burden of Risk

• Let Salesmen Sell

Fall Spring

• Customers Pick up Acres

• Replant Seed

• In-Season Sales

• Incent Sales of Specific Varieties

• Keep up with Shifting Planting Intentions

• Clean Up Sales

John Deere Financial Overview

Multi-use account

Regular Credit Limit(30-Day Credit Terms)

Special Terms Credit Limit(Deferred Credit Terms)

• Multi-use account is a revolving charge account

• Special Terms Limits are utilized for Input Financing

John Deere Financial Multi-Use Account (1 Ag Preferred Account - Two Credit Lines)

• Revolving Credit Limit

• Revolving Terms

• Pay in full, no interest or revolve

• Day to Day Purchases• Parts/Service• Fuel• Feed• Farm & Ranch goods

• Any ag merchant accepting JDF

• Unsecured

Regular Line Special Terms Line

•Seasonal Credit Line

•No monthly minimum

•Balance due in full on due date

•Crop Inputs Only• Seed• Chemical• Fertilizer• Custom Application

•Crop Input Merchants Offer

•Unsecured

John Deere Financial Multi-Use Account (1 Ag Preferred Account - Two Credit Lines)

• Customer rate = prime % plus an additive

• No interest if paid in full

• Merchant pays a Discount fee

• Behaves like other Revolving Credit Products

• Submit transactions at point of sale• On Line Transaction Center

(OTC)• Terminal• Compatible Software

• Funding in 2 business days

Regular Line Special Terms Line

• Customer rate determined by Sales Finance Program Sponsor• Sponsor is buying the rate down• Lower rate to grower means more

cost to sponsor

• Interest begins at transaction time

• Sponsor pays Discount fee

• Behaves like unsecured, short term installment note

• Submit transactions at point of sale• On Line Transaction Center (OTC)

• Funding in 2 business days

1

Welcome, Merchant

1. Log-in to the Merchant Toolkit

2. In the Special Programs section, select the Select my programs link

Select my programs

LOG_IN

LOG_IN

2

Select my programs

3

Select My Programs Options3. You may have up to three options to use depending on your

Merchant Agreement and location.

Select my 

programs

559999010

LOCAL MERCHANT59999010ADMIN OTC

for major ag inputs

ADMIN OTC

Qualifying product categories include (major ag inputs):

• Seed, • Fuel, • Fertilizer,• Crop Protectants

generally applied to Special Terms line of credit

ADMIN OTC

Prime + 4% A.P.R.Prime + 4% A.P.R.

DecemberDecember--20132013

1500.001500.00

Additional Training

Computer Based Trainings – Online in Merchant Tool Kit

Help Your Agribusiness Customer Manage Their Multi-use Credit Limit

Answering Common Questions About the Billing Statement

Create or Select Your Own Agribusiness Finance Program

Navigating the Merchant Service Toolkit

Sales Resources

Sales Resources

Kevin Nies (Inside Sales) 608-821-2549

NiesKevinG@JohnDeere.com

Jim Howard (Inside Sales) 515-267-4377

HowardJimmyW@JohnDeere.com